Proceedings of the Standing Senate Committee on
Issue 23 - Evidence, March 16, 1999
OTTAWA, Tuesday, March 16, 1999
The Standing Senate Committee on Aboriginal Peoples met this day at 10:05 a.m.
to examine and report upon aboriginal self-government.
Senator Charlie Watt (Chairman) in the Chair.
The Chairman: Before us this morning are witnesses from Syncrude Canada Limited.
Welcome. Please proceed.
Mr. Robert Loader, Manager, Aboriginal Affairs, Syncrude Canada Ltd.: Good
morning. With me this morning is Beverley Davies, the coordinator of the
aboriginal development program at Syncrude.
Thank you for inviting us to speak here today.
We have been asked to talk about aboriginal community development and
opportunity in Canada. We extrapolate in the relatively narrow text of the Wood
Buffalo region of northeastern Alberta. Aboriginal issues extend far beyond the
context of this limited geographic region. We could speak of aboriginal
development from any number of equally legitimate viewpoints, but the fact is I
would be speaking outside my field of expertise and experience if I were to
extend the discussion beyond Wood Buffalo. That is probably so if I even went
beyond Syncrude to any large degree, but it is clear that many of our successes
can be easily extrapolated to other regions and industries. It is important
that I speak today to that which I know best.
On the industrial side of the equation, I am here today because the company I
work for, Syncrude Canada Limited, is at the leading edge of a new era of
economic growth. How else could you describe $6 billion worth of new investment
under way or on the books? That is the amount we plan to spend for a massive
expansion that will create significant wealth and employment opportunity. It is
opportunity, plain and simple, and a lot of it for a long time to come.
It is the kind of opportunity that also happens to translate into human
development potential: potential for people to earn a livelihood, whether
directly with Syncrude or through our contractor or service company workforce.
There are benefits for the wider base of people who use the products we
produce, who know that we have a secure energy supply right here in Canada and
who, in one way or another, share in the prosperity that comes from all that.
That is one reason I am here. I know about the mining and oil industry and the
opportunities it can create. There is another reason, which is just as valid.
In tapping into human potential, Syncrude has recognized Canada's aboriginal
peoples as an important part of that overall universe.
In fact, over the last 20 years we have worked incredibly hard, and with
reasonable success, to build relationships of mutual value and benefit with the
aboriginal communities in our region. My purpose here today is to share some
insights, based on my expertise and experience, on how that has come about and
on how we maintain the relationship and share in the opportunity.
Let me start with a few words about Syncrude itself. The Canadian oil sands
cover an area of 77,000 square kilometres in northeastern and north-central
Alberta and are located in four major deposits: Wabasca, Cold Lake, Peace
River, and Athabasca. Athabasca, the largest of the four, encompasses the city
of Fort McMurray, which is Syncrude's home base. It has been estimated that the
bitumen resource in place amounts to 1.7 trillion barrels, greater than the
reserves of the entire Middle East. The recoverable reserves of about 300
billion barrels, more than in all of Saudi Arabia, are sufficient to supply
Canada's oil needs for the next 200 years.
Over the last 20 years, the oil sands industry has quietly grown approximately
seven-fold, reaching a level of production sufficient to supply approximately
25 per cent of Canada's petroleum requirements. Yet, after all of this, oil
sand development has just begun. In fact, less than 1 per cent of the
discovered recoverable oil sands resource has been produced, and it is estimated
that current production plants will access just 2 per cent of the recoverable
reserve throughout their working lives.
Syncrude shipped its first barrel of oil in 1978, and on April 16 of last year,
it shipped its 1 billionth. That is a remarkable achievement. With the $6
billion of new investment that I have already mentioned, there is every reason
to expect a continuing "good news" story in the decade ahead.
When I say that Syncrude is a leader in oil sands development, the proof lies in
our record of strong and innovative business performance. We are also a leader
in the quality of working life and the employment of aboriginal people. I would
like to devote the remainder of my presentation to a discussion of that
Building productive relationships is not something you do overnight. You build
them up over time. You get to understand one another and work together as
partners. You do not go out with a contract or a job offer in hand and give it
to someone simply because they belong to one group or another. You ensure that
they can do the job you need done, because if they cannot and you give it to
them anyway, then you have set them up to fail. You have accomplished nothing
but some short-term good public relations, and that will not last. You must go
deeper. The partnerships you build must be based on mutual respect, a
sustainable capability, professionalism, a supportive community, and, perhaps
above all, self-reliance. Put another way, you do not compromise your standards.
Instead, you work with people to help them understand and meet those standards.
It is my belief that at Syncrude we have accomplished those objectives. I do not
say that as some kind of caregiver who has helped the less fortunate; I say
that as the representative of a world-class corporation that has benefited from
its relationship with native peoples. We did not set out to achieve this
record, but the fact is that Syncrude is currently the largest industrial
employer of aboriginal people in Canada. That did not happen overnight. Our
aboriginal development program dates back to 1974, years before we even started
production. That is proof, I say, that at Syncrude we have always been
forward-looking. We know there is oil in the ground, but before we lift a
shovel, we look around and make note of where we are, where we want to be, and
the best way to get there.
We brought opportunity to the people of the area when we arrived, but we also
had a major impact on the native communities surrounding the plant, people who
had led a traditional way of life. The culture shock was tremendous. Native
people were, incredibly, entering foreign territory right in their own
backyards. We recognized from the beginning that our operations would have an
impact on the local and regional economic communities, and on traditional ways
of life, from Fort Chipewyan to Edmonton, from big cities to hamlets, and we
planned for that. We planned for it so that we could deal with issues before
they became problems, and because we knew that we would be there a long time,
and sooner or later, would come to rely on those same communities. If we did it
right, we could share the wealth and create widespread opportunity along the
Everyone has something to learn, and we worked closely with aboriginal
communities from the outset. We recognized very early that aboriginal people
would have a major interest in our company's future, and sought to integrate
the program into our operations as a normal way of doing business.
We were, and remain, committed to employment equity. However, as I said, we did
not fill quotas just for the sake of meeting that commitment. For example, we
helped to establish an industrial workers' course at Keyano College and hired
qualified aboriginal graduates of the course directly under the Syncrude
project. That program won an award, and has served as the basis for the Syncrude
Indian Opportunities Agreement, signed in 1976 by Syncrude, the Indian
Association of Alberta, and the federal government.
Frankly, it was not easy for anyone. Different lifestyles, expectations,
traditions and cultures made it difficult at times -- difficult for Syncrude to
bend the rules and for the aboriginal communities to cope with the rigours of
an industrial environment. The breakthrough came when we hired a native affairs
adviser to work with people in local communities. We asked community members to
screen job candidates for us, which they did, and they selected those whom they
believed were the most likely to succeed. Through an effort born of need, and a
true desire to understand, we built trust and respect, helped with coping
strategies, and we learned.
The fundamental objective was to help aboriginal people help themselves. We
worked with aboriginal employees and contractors on meaningful opportunities
and helped them to develop the appropriate tools to achieve their goals. One
sign that it worked is the fact that we no longer have, or need, a formal
native affairs department. We still provide some key services to ensure our
commitments are met, but aboriginal development has become part of a normal and
sensible way for us to do business.
Today, aboriginal people play a vital role in the oil sands industry, working as
heavy-duty mechanics, heavy equipment operators, millwrights, welders,
journeymen, administrators, lab technicians, engineers, accountants, and so on.
We make every effort to maintain or increase the overall proportion of
aboriginals directly employed by the company and continue to encourage our
contractors to do the same.
Today, aboriginal people represent approximately 13 per cent of our workforce.
The average salary for an aboriginal employee is $58,000 a year, and average
length of service is 8.4 years. This compares very favourably with the
workforce as a whole, as do the statistics on aboriginal productivity, safety,
and attendance records. The turnover rate for aboriginal employees is exactly
the same as that for employees as a whole.
It is also worth noting that we have the same standards of recruitment and
performance for aboriginal employees as for everyone else. All candidates must
have Grade 12, and we do not lower our requirements for aboriginal employees.
Our experience shows that we do not need to.
In effect, aboriginal communities have grown along with the oil sands. To me,
that means that aboriginal people are now well positioned to tap into the
opportunities of the huge new area of expansion that I mentioned earlier.
True partnerships go beyond just handing out jobs. The educational component of
Syncrude's program is designed to equip aboriginal people with the training
they need. We believe in a sound education for all of our employees, and we
promote and foster a culture of lifelong learning.
As a high-tech operation, our employees are our greatest assets, and we rely on
their skills and abilities in order to operate efficiently. Our future depends
on the development of a pool of skilled, well-educated employees, primarily in
our region of operations, and so we train and educate. We offer education
awards of $2,000 each to aboriginal persons wanting to further their education
in fields relating to oil sands. Last year, we began a five-year program of
financial support, $500,000 in total, for the native careers program at the
University of Alberta.
We are also big supporters of the learning-to-earning programs, such as co-op
apprenticeships, career prep programs, and registered apprenticeship programs
for high school students. We are involved with the schools in our communities,
encouraging adults to go back to school and kids to stay there. We go out and
provide information on the company, our requirements and expectations, and the
opportunities that will become available.
Beyond the specific requirements of the workplace and the overall expectations
we have of our employees, we strive to build an increased understanding of
aboriginal culture and traditional values. We recognize that negative
stereotypes will occasionally arise. However, the most effective way to combat
those is to continually provide information within the company that refutes
them. We provide training on aboriginal issues to non-aboriginal managers,
supervisors, and team leaders across the company.
Of course, not everyone can work directly for Syncrude. You cannot and should
not create positions for which there is no need. You do what you can, but there
is not an endless pool of jobs. When you are a major employer in your
community, as we are, you have an added responsibility. You must look outside
the factory walls, back to the community that existed when you arrived. For one
thing, you rely on that community for goods and services you cannot supply
yourself. Contractors servicing Syncrude are approximately one-fifth
aboriginal-owned and run operations, and they, in turn, are encouraged to hire
We needed a network of trusted suppliers, and so we made a limited number of
sole source awards and sometimes restricted bids to aboriginal suppliers and
contractors. Although we do not finance businesses, we have been known to come
up with some creative arrangements to help jump-start ventures until they are
running and profitable. However, these are short-term measures.
We do not look at it so much as a helping hand as an investment in our future,
and, as a fringe benefit, the future of the aboriginal community. Last year we
spent approximately $54 million with aboriginal-owned and operated businesses,
and in all, we have purchased over $350 million worth of goods and services
from aboriginal-run businesses since 1984.
These three, directly related elements of the program, that is, employment,
education, and business development exist. However, partnerships go beyond
that. They extend to the whole community, and we are committed to working with
local people, when requested, to help them define and meet their needs and
achieve self-reliance. In order to do that, we have built and maintained good
relationships with formal and informal leaders. We help wherever we can,
whenever we are asked, with physical, technical, and financial support to the
communities of the region, in everything from health to sporting events. The
overall goal is to improve the quality of life or provide benefits to the
In my experience, it is a high compliment to be called from time to time and
asked for advice. When we are asked, we give it freely, along with other
resources. We try to foster an appreciation of aboriginal culture amongst all
Canadians. One example is that we were a major sponsor of the interpretive
gallery at the provincial museum in Edmonton, which houses one of the finest
collections of aboriginal artifacts in the country.
Good corporate citizenship has become something of a buzzword. Some companies
engage in it for fear of the consequences of a backlash if something goes
wrong, and they hedge their bets against losing goodwill in that event.
However, that is doing it backwards. We are there at the pleasure of the
community, and the fact is that healthy communities make for a healthy
businesses environment, in that order.
It is the same with the environment. You do everything you can to protect and
preserve it, not because you fear getting caught if you break the rules, but
because you depend upon it as much as anyone else. We have a responsibility to
make our marks on the world in an environmentally benign way.
Syncrude recognizes the need to balance its commitment to secure Canada's energy
future, and we are on the right path to doing that, with a strong commitment to
leadership and sustainable development. We have a strong record of doing that.
As long-time residents of the region where Syncrude operates, aboriginal
stakeholders share our belief in a need to balance environmental and economic
considerations. The environment is the fifth and final element of our
aboriginal development program.
We consult and work extensively with local communities on environmental matters.
Last year we spent $6 million reclaiming land. One of the results was the Wood
Bison Trail, which started in 1993 as a joint effort by our company and the
Fort McKay First Nation, not just to restore the land, but also to bring back
one of the original inhabitants of the area, the wood bison. A herd of more than
200 animals now roams on reclaimed land, managed by the Fort McKay Band, and
enjoyed by people from inside and outside the region.
We understand the role our aboriginal neighbours play as stewards of the land
and we know and respect the fact that many of them depend upon it for survival
and sustenance. We also believe that the land must remain safe, healthy, and
enjoyable for future generations. It is a belief inspired by uniting the
viewpoints of industry with those of aboriginal society, and it is a belief in a
common direction that benefits everyone.
As I said at the outset, the good partnerships are about understanding and
mutual respect, and in order to work, they take time to build up. There are, no
doubt, some companies that have not yet measured up to that test. It will take
some time for them to do so because there are no quick-fix solutions.
In my view, Fort McMurray is not the only haven of native business opportunity
in Canada, or Alberta. The opportunity lies virtually everywhere. Perhaps, just
as Syncrude has learned by doing, others can learn from us, gain an edge, avoid
some of the pitfalls we encountered, and share in our successes, because we
know it can be done. Partnerships of mutual benefit can be established and we
can move forward and prosper together.
I personally look forward to a time when there will no longer be a need for an
aboriginal development program, and when all people will have an opportunity to
be successful, at Syncrude or anywhere else.
Senator St. Germain: How many aboriginals are affected by this? Do you have an
actual count of the aboriginal people in that area that were affected or
impacted by, or benefited from, Syncrude?
Ms Beverley Davies, Co-ordinator, Aboriginal Development Program, Syncrude
Canada Ltd.: When you say "impacted," do you mean people employed,
either directly or indirectly, by Syncrude?
Senator St. Germain: No, I am talking more about the whole community that
existed there when it was decided to develop the tar sands.
Ms Davies: From our research, we estimated approximately 800 to 1,000 aboriginal
people in that region at the time. The region is very large. It encompasses
probably 700 kilometres from north to south. There were approximately 800
people in this area at the time. Currently, there are close to 4,000 aboriginal
people in the region.
Senator St. Germain: Are the additional aboriginals people who traditionally
lived there and left and came back, or are they from other regions? Do you
Ms Davies: We have a fairly good idea. Approximately 25 per cent of them have
moved into the region and the rest are the local inhabitants.
Senator St. Germain: Towards the end of your presentation, you talked about them
still being able to live off the land. Is that a practical assumption?
Ms Davies: I do not think it is a practical assumption that 4,000 aboriginal
people can live off the land there, no.
Senator St. Germain: This area was extensively covered by treaties, was it not?
Ms Davies: Yes. It is covered by Treaty 8.
Senator St. Germain: Have they been treated equitably as far as the wealth that
was there and will it be shared equitably with them?
It is fine to say that they are being given opportunities to work in the system.
That is honourable and I compliment you on that. Perhaps the good government in
Alberta drove you in that direction, but you need not comment on that.
There were reserves there. Have all land claims been settled with the natives in
that area? Are they really sharing in the development in a manner that reflects
the value of the resource that was part of their lands?
Ms Davies: In my opinion, probably not. The First Nations people in that region
want some kind of royalty revenue or other kind of revenue from the oil sands.
The land claims that are outstanding are called "specific claims,"
where a proper count was not done. They are not land claims of a general kind.
One Métis organization has launched a fairly extensive lawsuit against
the federal, provincial, and municipal governments on the issues of
compensation and failure to consult.
Currently, Syncrude is part of a group called the Athabasca Tribal Council
Industry Working Group, which encompasses the five First Nations. Part of the
initiative of that working group is to examine creative ways of sharing the
benefits of this development through agreements other than royalties. The
Government of Alberta has made it fairly clear that it does not want to include
royalties as part of the conversation. We are looking at other opportunities to
develop a creative way to better share the revenue.
Senator St. Germain: Would you say that the Province of Alberta is providing
quality education, health care, and so on, for the people in that region?
Ms Davies: I am not sure that I am in a position to speak to that.
Senator St. Germain: From an educational point of view, is the system producing
people that you can hire? I realize that you do not want to get into a
political discussion and I am not trying to do that. It is fine that the
natives want royalties, but are the royalties that the province is receiving
being used to benefit them?
Ms Davies: Education is one of the fundamental issues in that region. The
current drop-out rate for aboriginal students between grade 9 and grade 12 is 8
out of 10. Clearly, this is a big concern for our industry because that is our
potential workforce. This is not purely altruistic, since we clearly need that
workforce, but we are very much motivated to implement educational programs, to
work with the communities in encouraging kids to stay in school.
It is a big, primarily cultural problem, and an issue of transition from the
outlying communities into the city high schools. Fort McMurray is a city of
40,000 people. Most of the aboriginal kids who go into high school there come
from communities of less than 400. The kids have problems with the transition
and we lose a lot of very bright students who do well up to that point, and then
Senator St. Germain: Are you mining any actual reserve land?
Ms Davies: No.
Senator St. Germain: Everything you are doing is off reserve?
Ms Davies: Yes.
Senator Chalifoux: Welcome to Ottawa and to the committee. It is not that long
since I was speaking to you both in Fort McMurray.
I have been involved in the tar sands development since its beginning in the
early 1970s. I do not know whether you can answer this question. At that time,
there were more than 1,000 people of aboriginal ancestry in that area. You are
only talking about treaty Indians and not Metis. I am talking about all
aboriginal people in the Fort McMurray area at that time. They were living a
traditional lifestyle, hunting, trapping, fishing, and working on the river.
Suddenly, Syncrude arrived and their whole lifestyle changed. How have you seen
the people and their lifestyle affected since those days?
Second, everyone knows that Fort McMurray is now the second largest Newfoundland
city in the country. People were brought in by your company. What effect has
that had on the aboriginal communities? That is another culture that was
introduced almost overnight.
I must compliment you. Last Friday, David Tuccaro received a National Aboriginal
Achievement Award for business and commerce. He owns nine companies now, thanks
to the oil sands industry. That is one benefit, but many detrimental things
have happened to the aboriginal community. What effects do you see in your
capacity as an aboriginal liaison?
Ms Davies: The aboriginal people in that region, when the oil sands development
began, had a very adequate set of skills for living off the land and following
their traditional lifestyle. They had the education, skills, and experience
they needed. Within a very short period of time, those skills and experiences
became inadequate for dealing with the situation.
Many of them, particularly those who are now aged 40 to 60, will never recover
from that. I think that is sad. We do have programs in the region to help those
people attain a basic level of literacy so that they can work on contracting
projects. If they are interested in going back to school, they can. Many of
them are not interested. They have had poor experiences with the school system
in the missions and so do not want anything to do with it. For that particular
age group, we mostly focus on trying to provide contract opportunities within
our company and in other companies.
The rest of the focus is on equipping those aboriginal people who no longer have
the proper set of skills and experience to be able to take advantage of the oil
sands industry and the spin-off industries in that region.
Senator Chalifoux: There is a land claim outstanding right now in the Anzac
area. That has been put forward already. That might help Senator St. Germain
with his question.
Ms Davies: That was the one I referred to previously as a lawsuit. Prior to that
suit, a land claim was submitted.
Senator Chalifoux: It is a land claim also on that area.
Ms Davies: I wanted to answer your second question as well.
When we examined our aboriginal development program around 1992, we realized
that we had been working hard towards achieving a fair representation of
aboriginal people in the region and had not been successful. We got up to 6 per
cent, but we stayed for about five years at about 6.1. Much of it had to do
with the issues that you mentioned, namely, bringing in so many people from the
outside, regardless of where they came from.
Syncrude introduced what in employment equity would be called a compensatory
justice program. We said that even though our company was downsizing, we would
increase the number of aboriginal employees until we reached 10 per cent. That
was a five-year program. In that, we tried to address those issues by focusing
on local indigenous applicants, and for all other intents and purposes we had a
hiring freeze. We were able to address that, but we certainly recognized what we
had done in those days.
Senator Chalifoux: We are studying self-government here. What effect do you
think that industry has on aboriginal self-government, not only in your area,
but all areas? You must have some idea of your effect on self-government.
Ms Davies: We primarily provide governments or First Nations with revenue and,
because of that, self-respect. That has many spin-off benefits as far as
building the confidence that they need to manage other affairs.
Senator Chalifoux: I always say, "It took the English 300 to 500 years to
go through the Industrial Revolution. We expected the aboriginal people to go
through it in 30 years or less and survive."
Senator Adams: I have visited your company with other committees. Our energy
committee visited your company three or four years ago. At that time, I was not
let into the area with computers because I had a beard.
Mr. Loader: They would not let you into the refinery?
Senator Adams: That is right.
In 1976, your company had an agreement called the Indian Operation Agreement. Is
that between the company and the Department of Indian Affairs regarding the
employment of natives? How did that begin? Your brief states that in 1976
Syncrude had an agreement with the Indians. What does that mean? Was it with
regard to employment or a joint venture with the company?
Ms Davies: When we were applying for our licensing project, we established an
agreement with the Government of Canada, the Government of Alberta, and the
Indian Association of Alberta, which was formed primarily of treaty Indians.
That agreement covered business development and employment. It was actually our
first formal agreement. It did not have any actual targets in it. It was aimed
at increasing the number of people that Syncrude hired and increasing the amount
of Syncrude's business with aboriginal companies.
That agreement focused primarily on status Indians. Even though at the time
Syncrude's initiative included Metis as well, that particular agreement
measured our success with status Indians as opposed to the entire aboriginal
When it expired, we formed another agreement with the local aboriginal community
and the Government of Alberta and, again, the Government of Canada. That
agreement included all aboriginal people, and in that one the aboriginal
community insisted on having targets, specific numbers that we could work
towards. We found that much more successful.
Senator Adams: That has expired now. How many years was it in operation?
Ms Davies: The Indian Opportunities Agreement expired in 1985 or 1986. The next
agreement with the Athabasca Native Development Council expired in 1993.
Senator Adams: Nothing exists now, just the company's initiatives.
Ms Davies: No. It has been our company's policy recently not to enter into
formal agreements. We may still need to do that, but we primarily made our
commitment in the public forum. We publish an annual review that outlines
Syncrude's commitment, and we make formal commitments through the energy and
utilities board. We act as a public steward and feel that that has been more
successful than some of the other agreements.
Senator Adams: Was that agreement successful? Since it expired, has there been a
decrease in the number of people who work for Syncrude? Did that system work
before, or why did it expire?
Ms Davies: Statistically, we have had better success without the agreement. The
Athabasca Native Development Corporation Agreement expired in 1993, and we put
together the program for reaching 10 per cent in 1992. Over that five-year
period, we went from 6.2 per cent of our workforce to over 10 per cent, whereas
in the time of the agreement we stayed at around 6 per cent. I do not know if
there is a correlation, but statistically we have had better luck with no
Senator Adams: When we were there, we saw many natives contracting for the
company as mechanics and heavy equipment operators. How does that system work?
Do you need 10 years with the company? The natives were happy with the contract
with the company, but can you have a contract for so many years and be
successful in keeping it? How does that work with the native people and the
shops, maintenance, trucking, and so on?
Mr. Loader: Are you talking about native organizations contracting with
Senator Adams: Yes.
Mr. Loader: In my opening statement, I said that in some cases we gave people a
hand to get started, but in every case we expected aboriginal contractors to
work effectively and efficiently and in a manner that makes them competitive to
any other company. Our experience has been that all have done so. Normally,
after the first contract expires and the work goes out for bids, the native
contractors will bid again, and in many cases they have been successful in
recapturing the contract. It always helps, of course, to get a contract back
when you have already been doing it because you probably know more about it
than someone else who is trying to get in on the action.
Senator Adams: Do those people not feel that because they are native that they
should be given priority? How does that work?
Mr. Loader: The only goal we set for ourselves with aboriginal businesses was to
try to achieve the same percentage as the demographics. We do about $300
million worth of business of supply and services a year, and our goal is to
have 10 per cent of that with aboriginal businesses, which would be about $30
million. In fact, it was $54 million last year and $56 million the year before.
We exceeded the goal by almost double because of the quality of service that
Senator Adams: New technology is coming out now. There are conveyor belts and so
on, and you are turning to the pipeline system now. How is that affecting
Mr. Loader: On an overall basis, there will be fewer people working to make a
barrel of oil than there used to be. However, with the expansion, Syncrude will
have more employees than it currently has. With better technology, we will not
have as many as we would have if we had stayed with the original technology.
I believe that many opportunities are coming and that many now exist for
aboriginal companies. We are just opening a new mine called Aurora, which has
some additional opportunities.
Ms Davies: We also have a broad range of contractors. Talking about technology,
we have aboriginal companies that own and operate computer-assisted drafting,
electronics and power line companies. There is a broad cross-section of the
kinds of companies that we have. It is my observation that they are very
adaptive and will be able to respond to changes in technology.
There is a shortage right across Canada of aboriginal people going into
engineering and technology, and it is a problem. We need to address that as
well because there will be a large need for that.
Senator Adams: If those companies have nothing to do with the bands, just the
ordinary companies in the reserve area, how does that work?
Ms Davies: We have a mix. We have some owned by First Nations, some owned by
individuals within First Nations, some owned by individuals within Metis
nations, and at least one or two owned by Metis nations themselves. We have
quite a broad range.
The Chairman: I have a question regarding the agreement that has been signed
between your company and the First Nation.
Is it a given when there is an agreement to be signed, whatever that agreement
might be, that the federal and provincial governments must be involved?
Ms Davies: No. I do not believe it is a given. The federal and provincial
governments are involved largely because they find that many programs are
spin-offs or requirements of that, particularly around education and
employment. They are always very welcome at the table.
We invited the federal government, the Department of Indian Affairs and the
provincial government to become involved in the current agreement that we have
now, which we have signed. That is not a specific Syncrude agreement, that is
an oil sands industry agreement with the Athabasca Tribal Council.
The Chairman: How much do you receive annually from the federal government to
honour those agreements that have been signed in terms of training programs at
Ms Davies: Syncrude does not receive anything.
The Chairman: It receives nothing from the federal or the provincial
Mr. Loader: Syncrude is not involved in any training programs that are funded
provincially or federally.
The Chairman: Are the training programs entirely funded by the oil company?
Mr. Loader: Yes.
The Chairman: Do the shareholders have any difficulties with that?
Mr. Loader: Our shareholders are mostly oil companies. There are two oil sands
trusts, which account for 10 per cent.
The Chairman: How do you account for the money that is spent on the training
sector when you evaluate your training at the end of the year?
Mr. Loader: We train all of our new employees. They come into entry-level
positions, then they go through an apprenticeship program whether or not they
The Chairman: In other words, there is no special program for the aboriginals;
it is applied across the board?
Mr. Loader: That is right. Our aboriginal program does not really exist because
we treat everyone as equally as we possibly can. There are no special programs
The Chairman: This is one of the reasons why, as you mentioned earlier, your
standard is the Grade 12 level and you do not compromise on that point?
Mr. Loader: No.
Senator Gill: I congratulate you on the work you are doing for aboriginal
peoples. Perhaps my colleagues here would disagree with me, but I find that
companies are in some respects doing the work of others.
My impression is that the work Syncrude is doing is rather similar to the
efforts of other large corporations in Canada. Take Hydro-Québec, for
instance. Although much criticism is directed at the corporation, it does many
things that would normally be the government's responsibility.
This kind of commitment seems entirely appropriate. I encourage companies to
keep up the good work. However, I have to wonder if a company like Syncrude
might not be better off putting some pressure on governments. I would imagine
that you are pressing them to assume their responsibilities toward aboriginal
peoples. For example, with respect to training, community social development
and so forth, corporations like yours seem to be shouldering a burden that
normally one might expect the provincial and federal governments to be
Moreover, non-aboriginals may resent the fact that you give some of the region's
aboriginal peoples preferential treatment. I would image that you are
criticized by aboriginals and non-aboriginals alike.
You must often tell yourself that you are doing someone else's work and acting
for someone who is not doing their job. Would a company such as yours not
benefit from meetings with other large Canadian corporations which could
eventually lead to some pressure being brought to bear on the federal and
provincial governments? Aboriginals are scattered around the country. While
their circumstances may not always be identical, they are often similar. This
situation is not overly political. It is merely a fact. I would be interested
in your views on the subject.
Mr. Loader: We must tread carefully in this area. Traditionally, Canadian
corporations have not told governments how to run their business. A number of
initiatives are under way, both in the Conference Board of Canada and through
Human Resources Development Canada, to try to get governments, aboriginal
communities and corporations to enter into different types of partnerships and
programs. They are trying to improve the economic position of all parts of
Canada and increase the success of all businesses, to perhaps get them closer
to the level of where Syncrude and the Fort McMurray region are now.
Apart from trying to specifically put pressure on governments and tell them
whether they have been working to a standard that is appropriate, we have not
done that and we are not in a position to do that. However, I hear you, and
what you said would certainly add strength to the whole program. There are many
aboriginal communities saying the same thing. I know that Senator Chalifoux has
Senator Gill: I stress this point because this gives us a false impression of
what relations should normally be like between your company, or companies
similar to your, and aboriginal peoples. The relationship is one of employer to
employee, that is one between individuals who want to increase their skills to
qualify for the best paying jobs, instead of associating all of this with land
claims. When one particular stakeholder -- in this case the government -- fails
to assume its responsibilities, the corporation has no choice but to deal with
such issues as claims, employment and the economy. To some extent, you are
taking the government's place. The oil sands of Western Canada represent
tremendous potential for the next two hundred or three hundred years. We are not
talking about a one-day commitment. It may be necessary to do some long-term
planning and to forge partnerships with other major companies in Canada's
natural resources sector. The latter need to have a clear understanding of
their responsibilities versus those of the government.
Mr. Loader: I agree. It would be very advantageous.
Senator Gill: What do you do about that?
Mr. Loader: I do not know. There is a lot of confusion. I can only say that we
have dealt directly with the aboriginal community to try to improve the lot of
all the citizens of the Wood Buffalo area, aboriginal or otherwise, so that
everyone gets an equitable share of the created wealth.
There is much to be done across the country. You mentioned Hydro-Québec.
I know people from that company who are in the same business as I am and they
do similar types of things.
Ms Davis spoke about the initiatives involving all the different companies that
are involved in the tar sands -- I believe there are eight -- working with the
Athabasca Tribal Council. They have approached the federal department DIAND and
the Alberta government department dealing with intergovernmental and aboriginal
affairs. They have put forth proposals for involvement by those governments.
They are waiting to hear back now from them. I do not know how else to answer
Senator Gill: Since it is difficult to act on behalf of the government in
certain fields, would it be possible for you to consider some kind of
partnership with the First Nations in terms of sharing the revenue? Really,
this is our objective. We want to share the revenue coming from the resources
where the people are living. They should get some money back. Are you just
waiting for the people to put pressure on you?
Mr. Loader: I do not know what we can say or do to help in that respect. The
federal government and the Alberta government, through royalty payments and
corporate income taxes, relieve us of a great deal of the money we make
already. The piece left after you pay everything off is not that enormous.
I suppose that that type of benefit sharing would have to be done through one
level of government or the other or both. I know aboriginal people have lobbied
for that kind of benefit sharing. I know, for instance, that the FSIN in
Saskatchewan is working at the moment with the federal and Saskatchewan
governments to figure out some kind of formula that provides for benefit sharing
from natural resources. It is not an area in which Syncrude has ever publicly
taken a stand, nor do I think we wish to do so today.
Senator Gill: Do you support the third order of government for the aboriginal
Senator Andreychuk: Do not answer that. It is a political question.
Mr. Loader: I cannot answer on behalf of Syncrude. I am not sure that I know
enough about it on a national basis to even answer it on a personal level.
Senator Pearson: In your responses to Senator Chalifoux about education, you put
your finger on an extremely sore point, which is that crucial period in
adolescence when many aboriginal children are getting lost. This is not your
fault; I am not saying that. You clearly understand that, increasingly, added
knowledge drives economic opportunities. Your workforce must be better educated
and you are assuming a portion of the cost of their education as part of your
social or human capital costs.
I am concerned about your observations. One can see what is happening. Children
are coming in from small communities, going into a large town and suddenly
feeling lost in a big high school. It is bad enough in ordinary cities.
You are doing several things in education. You are interested in partnership.
You have offered some partnerships in co-op situations, I guess. Are you allied
specifically to the high schools? There must be more than one high school.
Ms Davies: There are three high schools.
Senator Pearson: In New York, there is a program that awards black students
scholarships for remaining in school, full time. It is one of the more
imaginative ideas. One man founded the program and is giving out a certain
amount of money to any graduate. It is a real carrot.
I am throwing that out as an idea. Do you have more specific ideas? Do you have
in place a structure to look at ideas?
Ms Davies: We have been involved in three programs directly with the high
schools. One is mentioned in Mr. Loader's presentation, namely the Registered
Apprenticeship Program, or RAP. It has been one of the most successful ones. We
instituted it as a pilot project for the community of Fort MacKay, which is our
closest neighbour. In that particular community, the drop-out rate was 90 per
RAP is a work-to-school transition program for students beginning at Grade 10.
They work for six months for our company and they get paid. Then they go to
school for six months. They also get school credit for that six months. For
Grades 11 and 12, they are working and going to school. When they finish, they
graduate with Grade 12 as well as their first year of a registered
apprenticeship, so they are indentured. There is a natural transition into the
next level, which is the co-op program.
RAP has already had a tremendous impact on student attendance. Some students'
attendance rates rose from 35 to 50 per cent to 75 to 90 per cent. Their marks,
just by the fact that they are attending school, have correspondingly gone up
The program has its hiccups; it is not perfect. We work on it on almost a
monthly basis to try to iron out the problems, but it has been very successful.
We also work with the schools and the scholarship program, as well. We give each
student that graduates a gift. We support them when they go to university with
both a scholarship of $2,000 per year and a guaranteed summer job. We try to
provide support for any high-school graduate from the outlying communities who
wishes to go to university. We have been able to support essentially every one
of them in that endeavour.
Senator Pearson: How long have those two programs been in place?
Ms Davies: The RAP program has been in place for two years and the scholarship
program for probably five. It has produced one aboriginal engineer graduate,
who is now working for us.
Senator Pearson: That is good to hear. It takes time for that to build up. The
fact that they are quite recent looks like you are moving toward a solution.
Ms Davies: Yes. On a formal level, the agreement that I mentioned with the
industry that represents 11 companies -- some of them are the larger oil
companies like Petro Canada and Esso -- has a component directly concentrating
on employment and education. We are looking at a program called Career Path
Mentoring, which we believe represents a positive solution to some of the
issues. It takes aboriginal students at about Grade 9 and talks about a path.
It says, "Where would you like to be in the future? Where are you right
now?" It outlines a step-by-step path. The student makes a commitment to
go a step, and we make a commitment to go a step. We give them a mentor who is
an aboriginal person working in our company and work them through the steps.
Again, it has been very positive.
The Chairman: At present, I do not believe that you have an aboriginal person at
the top management level, at the same capacity as you; is that correct?
Mr. Loader: That is true. We have some aboriginal people in fairly high levels,
but I do not believe there are any at my level. Ms Davies is an aboriginal
person who is at a fairly high level within our company.
Ms Davies: However, I am not at his level, yet.
The Chairman: I believe there eight Alberta Metis blocks in northern Alberta
living under the provincial legislation that was passed in 1991. Would that
have any impact on the geographical area where your company is located?
Ms Davies: The Metis settlements in Alberta are south of what we consider to be
our region. They are actually in the same zone as our Metis nation is located,
but we include the geographical area of Conklin to Fort Chipewyan, which is
north of the Metis settlements. We have quite a few employees who were
recruited about 15 years ago from the Metis settlements in that region.
The Chairman: Is the Metis settlement council involved in your activities,
directly or indirectly?
Ms Davies: Indirectly, yes. We have met with the Metis councils on several
occasions from the south to talk about business opportunities, but at Syncrude
we have almost a preferential hiring and business policy for people in our
region. They are not excluded by any means. We are particularly interested in
their high school graduates who go on to university because we see them as being
a good potential source for professional aboriginal employees. They are from
there, so they will not leave like the ones that we hire from Calgary and
The Chairman: I believe one of the senators asked a question about royalties.
Does your company feel obliged to discuss royalties with the aboriginal people?
I know that you answered it in reference to the impact agreement. I call that
going around the issue. You also mentioned that provincial laws apply, so
therefore, that matter must be visited by the provincial government.
Mr. Loader: The federal government and the provincial government need to spend
some time working together to figure out exactly how to get around that.
The Chairman: Will it be better for the shareholders and the aboriginal people
to talk directly and try to arrive at a consensus and then move to the
government later? Would that not be more expedient?
Mr. Loader: Although the aboriginal community in our area would probably be very
happy if corporations became involved in this discussion, they have never
officially suggested that we should do it. They are working hard with the
provincial and the federal governments to try to figure out where they want to
go in this area. I do not think that we can have much effect until we find out
what the ground rules are. The current ground rules are the laws of Alberta and
Canada, and I believe we are following them to a "T." We will
continue to do that.
The Chairman: Until such time as there is a further advancement in that area and
you feel that ownership, can the shareholders bring the subject matter to the
Mr. Loader: I do not believe that either I or Syncrude can speak on behalf of
our owners in that area because the vast majority of them are operating in
other places in Canada on a much more national scale than we are. We are a
unique company in that we operate in one small location in Canada. The majority
are national companies, and some are American oil companies. It would be
presumptuous of Syncrude or myself to try to figure out what their views are. I
would have to pass on that question.
The Chairman: If the aboriginals mounted pressure on the oil companies, would
they be willing to discuss this?
Ms Davies: The pressure has been there for the last five years. One of the
elements of this agreement with the Athabasca Tribal Council put royalties on
the table. We agreed -- and I am speaking for the 11 companies -- to speak with
the provincial and federal governments about whether or not we could even
include it as a discussion item within this agreement. The response back from
the Alberta government was that if royalties were on the table, that they would
not participate in the agreement.
The Chairman: Who would not participate?
Ms Davies: The Alberta government would not. Therefore, in the interests of the
agreement, we removed it from the table. Both the aboriginal community and
ourselves agreed to remove it from the table, and they will pursue it on their
The Chairman: What does that mean, "pursue it on their own"?
Ms Davies: The First Nations governments will continue to pursue it directly
with the Alberta and Canadian governments.
The Chairman: Thank you for your excellent presentation. We heard a great deal
about achievement and success. Keep going in that direction. Hopefully, one day
you will convince your shareholders to take a good look at a genuine
partnership rather than a partnership that does not really mean anything. Thank
Mr. Loader: Thank you very much for listening to us.
The committee adjourned.